A Snapshot of the Pacific Northwest Multifamily Housing Market

The second quarter of 2026 brought gradual market improvement, although conditions remain highly competitive and rent growth continues to be limited. Performance varied by market, but the overall trend was more encouraging than it was during the winter. Leasing activity strengthened as we moved into the traditionally busier spring and summer seasons, helping absorb recently delivered inventory and reduce some of the supply pressure that shaped the past two years.

The Vancouver market continued to demonstrate relative resilience. Vacancy stood at 6.7%, while asking rent growth was slightly positive at 0.1%. The submarket absorbed 734 units over the past year compared with 783 deliveries, and population inflows continue to support renter demand. Vancouver remains one of the Portland metro area’s stronger-performing submarkets, benefiting from employment access, tax advantages and continued interest from renters relocating to the Washington side of the region.

The broader Portland market showed signs that its prolonged supply imbalance is beginning to ease. Trailing 12-month absorption reached approximately 3,500 units, nearly matching the 3,442 units delivered, while vacancy held at 7.1%. However, asking rents remained under pressure, declining 0.5% year over year. Competition is still most pronounced among Class A properties, where vacancy reached 8.3% and concessions of two or even three months free remain available in some urban submarkets.

The Tri-Cities market produced one of the more significant vacancy improvements. Vacancy declined to 6.8%, down approximately 3.1 percentage points from a year earlier, as 573 units were absorbed compared with only 91 units delivered. That improvement is encouraging, but pricing remains sensitive. Asking rents declined 0.5% over the past year, and more than 1,000 units remain under construction, which will continue to create competition as projects deliver and begin leasing.

Salem remains strong, with vacancy declining to 5.5%. The market absorbed 686 units over the past 12 months, exceeding the 528 units delivered during that period. Although asking rents declined 0.4% year over year, the slowdown in new construction should allow the market to continue working through its remaining supply overhang.

Across all markets, the gap between asking rents and effective rents continues to show the impact of concessions. Renters remain price-conscious, and properties that push rents beyond what the market will support are likely to experience slower traffic, weaker conversion and greater resistance at renewal. Newer Class A communities remain the most exposed to this pressure, while established mid-tier and value-oriented properties are generally benefiting from less direct competition and stronger affordability.

The construction environment is also beginning to shift. New development has slowed considerably in Portland, Salem and Vancouver due to elevated financing costs, tighter lending standards and economic uncertainty. Portland is on pace for its lightest apartment delivery year in roughly a decade, while Salem has only 394 units under construction. Vancouver’s pipeline has fallen substantially from its recent peak, although approximately 1,170 units remain underway. The Tri-Cities is the exception, with 1,070 units under construction, equal to approximately 6.8% of its current inventory.

The improving leasing season is a positive sign, but the remainder of 2026 is still expected to reward disciplined execution rather than aggressive rent growth. Communities will need to closely monitor competitors, respond quickly to changes in traffic and availability, and evaluate pricing based on effective rent rather than advertised rent alone. Strong lead generation, timely follow-up and clear differentiation will remain critical, particularly for properties competing against newly delivered communities with large concession budgets.

Predictions for the remainder of 2026

The outlook across the four markets generally points toward gradual stabilization rather than a rapid rebound.

In Portland, demand is expected to outpace deliveries through the remainder of 2026, allowing vacancy to decline slowly. However, asking rent growth may not move firmly into positive territory until 2027, particularly for higher-end communities still competing with recently delivered inventory.

Vancouver is expected to experience modest vacancy compression as construction slows and population growth continues to support renter demand. Rent growth should gradually improve, although near-term gains are likely to remain limited while newer properties complete their initial lease-up periods.

Salem’s outlook remains comparatively stable. Its lower vacancy, diversified employment base and declining construction pipeline should support continued absorption and improving rent performance into 2027.

In the Tri-Cities, vacancy is expected to remain manageable, but the large construction pipeline may temporarily increase availability as new communities open. The market report forecasts annual rent growth improving to approximately 1% by the end of 2026, following the rent declines recorded over the past year.

Bottom line: The second half of 2026 should be stronger than the first, but recovery will remain uneven. Rent growth is likely to be modest, concessions will continue to influence leasing decisions, and new supply will remain an important factor in select submarkets. Owners and operators who maintain realistic pricing, protect retention, invest in visibility and respond quickly to changing conditions will be best positioned to improve occupancy and revenue as the market gradually tightens.